Q4 2024 KORU Medical Systems Inc Earnings Call
Can only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded.
I'd now like to turn the conference over to Luisa Smith of Gilmartin Group. Please go ahead.
Luisa Smith: Thank you Julian and good afternoon, everyone. Joining me on the call today are Linda RB President and CEO of cover medical systems, and Tom Adams, Chief Financial Officer.
Speaker Change: Year 2024, Financial Results Conference Call and Webcasts. At this time, all participants are near listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded.
Speaker Change: Earlier today cover released financial results for the fourth quarter ended December 31, 'twenty 'twenty four a copy of the press release is available on the company's website.
Speaker Change: I encourage listeners to have our press release in front of you, which includes our financial results as well as commentary on the quarter.
Speaker Change: I would now like to turn the conference over to Louisa Smith of Gayle Martin Group. Please go ahead.
Louisa Smith: Thank you, Julian, and good afternoon, everyone. Joining me on the call today are Linda Tharby, President and CEO of Co-Room Medical Systems, and Tom Adams, Chief Financial Officer.
Speaker Change: Additionally, we will use slides to further support our commentary on todays call, which are also available on the Investor Relations section of our web site.
Speaker Change: During this call we will make certain forward looking statements regarding our business plans and other matters. These comments are based on our predictions and expectations as of today.
Speaker Change: Earlier today, Cobra released financial results for the fourth quarter and to December 31st, 2024.
Speaker Change: A copy of the press release is available on the company's website.
Speaker Change: Actual events or results could differ materially due to risks and uncertainties, including those mentioned in the associated press release and our most recent filings with the SEC.
Speaker Change: I encourage listeners to have our press release in front of you, which includes our financial results as well as commentary on the quarter.
Speaker Change: We assume no obligation to update any forward looking statements.
Speaker Change: Additionally, we will use slides to further support our commentary in today's call, which are also available on the Investor Relations section of our website.
Speaker Change: During the call management will also discuss certain non-GAAP financial measures you will find additional disclosures, including reconciliations of these non-GAAP measures with comparable GAAP measures in our press release, the accompanying investor presentation and SEC filings for.
Speaker Change: During this call, we will make certain board-looking statements regarding our business plans and other matters These comments are based on our predictions and expectations as of today actual events or results could differ materially due to risks and uncertainties including those mentioned in the associated press release and our most recent filings with the SEC we assume no obligation to update any board-looking statements [inaudible]
Speaker Change: For the benefit of those listening to the replay. This call was held and recorded on Wednesday March 12, 2025 at approximately 430 P. M. Eastern time. Since then the company may have made additional comments related to the topics discussed.
Speaker Change: During the call, management will also discuss certain non-GAAP financial measures.
Speaker Change: I'd now like to turn the call over to Linda Barbie, President and CEO Linda. Please go ahead.
Speaker Change: You will find additional disclosures, including reconciliations of these non-GAAP measures with comparable GAAP measures in our press release, the accompanying investor presentation, and SEC filings.
Linda Barbie: Thank you Luisa and good afternoon, everyone and thank you to all the investors and analysts joining us on our earnings call today.
Tom: I'll begin with commentary on our strategic strategic progress, including fourth quarter and full year updates followed by Tom who will review, our financials and 2025 guidance.
Linda Barbie: We will then open the line for your questions.
Linda Barbie: 'twenty 'twenty four marked a significant year for core medical with several advancements in our strategy to become a global leader in large volume subset cutaneous drug delivery in the home and in the clinic.
Linda Barbie: Today. The majority of this large volume subcutaneous market is made up of immunoglobulins, which accounts for approximately 90% of our current patient base.
Speaker Change: I'll begin with commentary on our strategic progress, including fourth quarter and full year out stage, followed by Tom who will review, our financials and 2025 guidance.
Linda Barbie: The scape market grew more than 10% in 2024 as a result of rising global infection rates driving increased patient diagnosis.
Speaker Change: We will then open the line for your questions.
Linda Barbie: And with only 20% to 30% global penetration of skip into the broader market, we see significant growth potential ahead.
'twenty 'twenty four marked a significant year for core medical with several advancements in our strategy to become a global leader in large volumes.
In addition to this course gig market the broader large volume subcutaneous market is rapidly growing.
Speaker Change: Cutaneous drug delivery in the home and in the clinic.
Speaker Change: Today. The majority of this large volume subcutaneous market is made up of immunoglobulins, which accounts for approximately 90% of our current patient base.
Linda Barbie: There are eight over 18 large volume drugs in development as we continue to see pharmaceutical companies drive their portfolios.
Subcutaneous format supporting the broader trend of movement of care away from the hospital setting.
Speaker Change: Gig market grew more than 10% in 2024 as a result of rising global infection rates driving increased patient diagnosis and with only 20% to 30% global penetration upscale into the broader Iot market, we see significant growth potential ahead.
Linda Barbie: These novel therapies represent a significant opportunity and the growing potential to bring new patients onto the core freedom infusion system.
Linda Barbie: We also delivered strong financial performance in the year.
Speaker Change: In addition to the Sikorsky market the broader large volume subcutaneous market is rapidly growing.
Linda Barbie: Fourth quarter results saw record setting revenues continued gross margin expansion and positive cash flow.
Speaker Change: There are eight over 18 large volume drugs in development as we continue to see pharmaceutical companies drive their portfolios.
Linda Barbie: Q4 revenues grew 23% and full year revenues totaled $33 6 million representing 18% growth.
Speaker Change: Two Chinese format supporting the broader trend of movement of care away from the hospital setting.
Each of our businesses saw double digit increases our core business grew by 16% on the year outperforming robust SCID market growth as a result of great work by our team to drive increased market share capture and enter new international geographies.
Speaker Change: These novel therapies represent a significant opportunity in the growing potential to bring new patients onto the core freedom infusion system.
Speaker Change: We also delivered strong financial performance in a year.
Speaker Change: Fourth quarter results saw record setting revenues continued gross margin expansion and positive cash flow.
Linda Barbie: Novel therapies also as a strong quarter and year with an increased number of pharmaceutical collaborations and increased clinical trial supply orders.
Q4 revenues grew 23% and full year revenues totaled $33 6 million representing 18% growth.
Linda Barbie: This strong novel therapies performance was highlighted by the addition of four new collaborations to our pipeline in 2024 and the announcement of an additional two collaborations in the first two months of this year.
Speaker Change: Each of our businesses saw double digit increases our core business grew by 16% on the year.
Performing robust S. P. I G market growth as a result of great work by our team to drive increased market share capture and enter new international geographies.
Linda Barbie: From an operational standpoint, we expanded our gross margin, which led us to a record setting gross profit for the full year of 2024.
Linda Barbie: Year end cash balance of $9 6 million exceeded our previously communicated expectations and we generated positive cash flows in the fourth quarter.
Speaker Change: Novel therapies also has a strong quarter and year with an increased number of pharmaceutical collaborations and increased clinical trial supply orders.
These accomplishments paired with disciplined operating expense management throughout the year have allowed us to drive further leverage within the business as we drive to profitability.
Speaker Change: This strong novel therapies performance was highlighted by the addition of four new collaborations to our pipeline in 2024 and the announcement of an additional two collaborations in the first two months of this year.
Linda Barbie: Lastly, we are initiating our 2025 guidance to include the following <unk>.
Speaker Change: From an operational standpoint, we expanded our gross margin, which led us to a record setting gross profit for the full year 'twenty 'twenty four.
Linda Barbie: Net revenues between 38, and $39 million representing growth of 13% to 16%.
Linda Barbie: Full year gross margin between 61, and 63% and operational cash flow positive for the full year of 2025.
Speaker Change: Year end cash balance of $9 6 million exceeded our previously communicated expectations and we generated positive cash flows in the fourth quarter.
Linda Barbie: Tom will go into greater detail on each of these metrics and our assumptions towards the end of our prepared remarks.
Speaker Change: These accomplishments paired with disciplined operating expense management throughout the year have allowed us to drive further leverage within the business as we drive to profitability.
So overall, a very good year of performance across the entire company and we've carried that into a strong start to 2025.
Speaker Change: Lastly, we are initiating our 2025 guidance to include the following that.
Linda Barbie: Moving to slide four we have made meaningful progress during the year on each of our strategic growth pillars.
Speaker Change: Net revenues between 38, and 39 million representing growth of 13% to 16%.
Linda Barbie: Within our domestic core business and as I mentioned on the previous slides the U S gig market grew about 10% in 2024.
Speaker Change: Full year gross margin between 61, and 63% and operational cash flow positive for the full year 2025.
Linda Barbie: This marks the eighth consecutive quarter of year over year U S market growth.
Speaker Change: Tom will go into greater detail on each of these metrics and their assumptions towards the end of our prepared remarks.
Linda Barbie: And serves as a strong catalyst for our base business as more chronic patients are diagnosed with immuno deficiencies and begin therapy utilizing the <unk> system.
Speaker Change: So overall, a very good year of performance across the entire company and we have carried that into a strong start to 2025.
Linda Barbie: We delivered another record quarter as Q4 domestic core revenues grew 20% over the prior year and full year revenues grew 12% outpacing the overall market.
Speaker Change: Moving to slide four we have made meaningful progress during the year on each of our strategic growth.
Speaker Change: Within our domestic core business and as I mentioned on the previous slide the U S gig market grew about 10% in 2024.
Linda Barbie: This was driven by additional market share capture as we further penetrate new and existing accounts.
Additionally, we've seen an accelerated transition in the domestic market towards pre filled syringes.
Speaker Change: This marks the eighth consecutive quarter of year over year U S market growth.
Speaker Change: And serves as a strong catalyst for our base business is more chronic patients are diagnosed with immuno deficiencies and begin therapy utilizing macquarie.
Linda Barbie: Pharmaceutical companies shift their supply to the pre filled syringe format.
Linda Barbie: <unk> is well positioned for this transition as our current and next generation systems, both accommodate prefilled syringes and our ongoing collaboration with shop allows us to stay agile with any additional pre filled format changes coming to the market.
Speaker Change: Uh huh.
We delivered another record quarter as Q4 domestic core revenues grew 20% over the prior year and full year revenues grew 12% outpacing the overall market.
Linda Barbie: Moving to international it was a breakthrough year for US we delivered 32% growth for the full year and 14% growth in the quarter.
Speaker Change: This was driven by additional market share capture as we further penetrate new and existing accounts.
Speaker Change: Additionally, we've seen an accelerated transition in the domestic market towards pre filled syringes.
Linda Barbie: The international <unk> market continues to grow with strong supply volumes and continued patient growth will.
Speaker Change: As pharmaceutical companies ship their supply to the pre filled syringe format.
Linda Barbie: We're continuing to capitalize on these trends as we entered multiple new geographies through new distributors in the Middle East North Africa and in Eastern Europe.
Speaker Change: Corey is well positioned for this transition as our current and next generation systems, well accommodate pre filled syringes and our ongoing collaboration with shop allows us to stay agile with any additional pre built format changes coming to the market.
Linda Barbie: Additionally, we have had broad strength across our established geographies, where we are consistently gaining market share in large markets like the UK, Germany and France.
Moving to international it was a breakthrough year for US we delivered 32% growth for the full year and 14% growth in the quarter.
Linda Barbie: 2024 was a great year for our international team with strong execution on our expansion strategy and we are excited to carry that momentum into 2025.
The international <unk> market continues to grow with strong supply volumes and continued patient growth.
Linda Barbie: Moving to novel therapies are empty pipeline was further diversifies after entering four agreements in 2024, bringing our total collaboration number to 15, which spans a wide range of therapy areas.
Speaker Change: We're continuing to capitalize on these trends as we entered multiple new geographies from new distributors in the Middle East North Africa and in Eastern Europe.
Speaker Change: Additionally, we had broad strength across our established geographies, where we are consistently gaining market share in large markets like the UK, Germany and France.
Linda Barbie: This includes two edition to the pipelines, which we announced in the first quarter of this year.
The first comes in the form of a new device collaboration for Nexgen skips.
'twenty 'twenty four it was a great year for our international team with strong execution on our expansion strategy and we are excited to carry that momentum into 2025.
Linda Barbie: System and collaboration with our shop partnership.
Linda Barbie: The second is a new nephrology drug candidate that has the potential to bring an additional 300000 annual infusions onto the core system.
Speaker Change: Moving to novel therapies are empty pipeline was further diversifies after entering four agreements in 'twenty 'twenty four bringing our total collaboration number to 50, which spans a wide range of therapy areas.
In the near term, we have seven opportunities with potential commercial launches by 2026.
Linda Barbie: Finally, as you May have noted in our press release, we are renaming our novel therapies business in pharma services and clinical trials starting in the first quarter of 2025.
This includes two edition to the pipelines, which we announced in the first quarter of this year.
Linda Barbie: This change will have no impact on our reporting our financial statements and reflects the nonrecurring nature of the business.
Speaker Change: The first comes in the form of a new device collaboration for next Gen skips.
And collaboration with our shop partnership.
Linda Barbie: Tom will provide some additional detail on this change later in our prepared remarks.
Speaker Change: The second is a new nephrology drug candidate that has the potential to bring an additional 300000 annual infusions onto the core system.
Linda Barbie: Before we move ahead to some future catalysts I want to address the announcement from the FDA on Monday regarding the voluntary withdrawal of certain lots of immunoglobulins by several margin facts pharmaceutical manufacturers.
Speaker Change: In the near term, we have seven opportunities with potential commercial launches by 2026.
Speaker Change: Finally, as you May have noted in our press release, we are renaming our novel therapies business in pharma services and clinical trials starting in the first quarter of 2025.
Linda Barbie: I'll be effected drugs included in the announcement only one was skeg related zombify.
Linda Barbie: Yesterday, the manufacturer of Brussels announced it will not have an impact on their manufacturing plants and thus we expect it to be short term in nature we.
This change will have no impact on our reporting our financial statements and reflects the nonrecurring nature of the business.
We anticipate that any supply disruption from this manufacturer will be absorbed by the capacity of other pharmaceutical manufacturers and we do not expect to see any disruption to our business.
Speaker Change: Tom will provide some additional detail on this change later in our prepared remarks.
Before we move ahead to some future catalysts I want to address the announcement from the FDA on Monday regarding the voluntary withdrawal of certain lots of immunoglobulins Shadbolt Martin attacks pharmaceutical manufacturers.
Okay.
Linda Barbie: Moving on to what we see as significant drivers of value for the company one of the most attractive parts of our business is our recurring revenue base, which represents approximately 75% of our revenues.
Speaker Change: I'll be affected drugs included in the announcement only one was scared related.
Speaker Change: Got it.
Yesterday, the manufacturer Grackles announced it will not have an impact on their manufacturing plants and thus we expect it to be short term in nature.
Linda Barbie: We now have approximately 49000 patients.
Linda Barbie: About 45000 of these are from recurring chronic skin patients.
Speaker Change: We anticipate that any supply disruption from this manufacturer will be absorbed by the paucity of other pharmaceutical manufacturers and.
Linda Barbie: This represents about $2 million annual recurring infusions, which grew about 18% on a year over year basis with.
Speaker Change: And we do not expect to see any disruption to our business.
Linda Barbie: With continued <unk> market growth share increases driven by new product launches and international expansion. We expect to see continued mid teens growth rate in this recurring revenue base.
Speaker Change: Moving on to what we see as significant drivers of value for the company one of the most attractive parts of our business is our recurring revenue base, which represents approximately 75% of our revenues. We now have approximately 49000 patients of which about 45000 of these.
Linda Barbie: Next we continue to see our O U S business as a significant growth driver for the company as we expand our presence across various geographies outside of the U S.
Our from recurring chronic skin patients.
This year, our growth was in excess of 30% well above the market growth.
Speaker Change: This represents about $2 million annual recurring infusions, which grew about 18% on a year over year basis with.
Linda Barbie: We believe that we will be able to sustain a plus 20% growth rate as we continue to execute our international strategy and capture additional market share in new and existing regions.
Speaker Change: With continued skip market growth share increases driven by new product launches and international expansion. We expect to see continued mid teens growth rate in this recurring revenue base.
Linda Barbie: It currently stands the international market as both large and Underpenetrated for quarter.
Linda Barbie: We hold about 10% share of a roughly $60 million Oh, you escape markets leveraging.
Speaker Change: Next we continued to see our O U S business as a significant growth driver for the company as we expand our presence across various geographies outside of the U S.
Linda Barbie: Leaving significant room for our business to grow as.
Linda Barbie: As part of our strategy to expand our international addressable market, we are targeting onetime consumable needle set sales and E pump dominant markets E pump companies do not have assumable needle set and we work in collaboration to provide the market with a needle set for use with any mechanical or you pump with <unk>.
Speaker Change: This year, our growth was in excess of 30% well above the market growth.
We believe that we will be able to sustain a plus 20% growth rate as we continue to execute our international strategy and capture additional market share in new Mexico seeking regions.
Speaker Change: As it currently stands the international market as both large and Underpenetrated for Corp.
Linda Barbie: To further capitalize on this with our Nextgen consumables launch.
Linda Barbie: We're excited to carry our O U S momentum into 2025 with accelerated growth driven through increased penetration and current EU and us during Europe markets and need geographic countries, helping to continue to transform <unk> into a global infusion systems provider.
Speaker Change: We hold about 10% share of a roughly $60 million Oh, you escape market leveraging <unk>.
Speaker Change: Leaving significant room for our business to grow.
Speaker Change: As part of our strategy to expand our international addressable market. We are targeting one time consumable needle fat cells and eat pump dominant markets you pump companies do not have a super Bowl needle sat and we work in collaboration to provide the market with a needle for use with any mechanical or you Paul we.
Linda Barbie: Moving to our novel therapies pipeline, we announced the addition of two new collaborations since the start of the year and adopt updated seven commercial opportunities by 2026 compared to the prior six.
Plan to further capitalize on this with our Nextgen consumables launch Brooks.
Linda Barbie: Among the seven four are within the escape space and will lead us to either increased domestic penetration or further international expansion opportunity.
Speaker Change: We're excited to carry our O U S momentum into 2025 with accelerated growth dropping through increased penetration and current EU and its Jordan Europe markets and new geographic countries, helping to continue to transform <unk> into a global infusion systems provider.
Linda Barbie: The remaining three represent new drugs, it will give us access to over 500000, new potential patients and nearly 1 million potential annual infusions three years post drug launch.
Speaker Change: Moving to our novel therapies pipeline, we announced the addition of two new collaborations since the start of the year and adopt updated seven commercial opportunity by 2026 compared to the prior six.
Linda Barbie: The largest opportunity within these new drugs is of course oncology for which we are completing market research and go to market requirements for a U S launch and look forward to updating you on our plans in the coming quarters.
I'm almost seven four are within the <unk> space and will lead us to either increase domestic penetration or further international expansion opportunity. While the remaining three represent new drugs. It will give us access to over 500000, new potential patients and nearly a million potential annual infusions three years post.
Moving to our newly announced collaborations the first of the new opportunities is in tandem with our partner shot and will be for an expansion of a current pharmaceutical partners IV drug into the pre filled syringe format and compatibility with our nexgen system.
Linda Barbie: As the market continues to shift towards pre filled syringes.
Speaker Change: Launch the largest.
Linda Barbie: The partnership will allow us to further position <unk> as the global leader in skin Prefilled drug delivery.
Speaker Change: Opportunity within these new drugs. It was of course oncology for which we are completing market research and go to market requirements for a U S launch and look forward to updating you on our plans in the coming quarters.
The second collaboration is with the phase III trial for an expanded nephrology indications for a drug that is already commercialized with quota for another indication.
Moving to our newly announced collaborations the burst of the new opportunities is in tandem with our partner shot and will be for an expansion of a current pharmaceutical partners IV drug into the pre filled syringe format and compatibility with our nexgen system.
Linda Barbie: Spanned label is expected to treat a rare renal disorder with a patient population of approximately 30000 patients and will give <unk> access to an additional 300000 potential annual infusions, bringing our total potential additional infusions from new drugs to $1 2 million three years post launch.
Speaker Change: As the market continues to shift towards pre filled syringes.
Speaker Change: The partnership will allow us to further position Corey is the global leader in skin pre sell drugs deliberate.
Linda Barbie: Each of these opportunities reflect our continued commitment to expand into new therapy areas. While also maintaining our advantage and our core business I'm very excited for the potential that each of these 15 collaborations brings to the table as they near launch and commercial revenue opportunity for <unk> in 2026.
Speaker Change: The second collaboration is with the phase III trial for an expanded nephrology indications for a drug that is already commercialized with quota for another indication.
Spanned at label is expected to treat a rare disorder with a patient population of approximately 30000 patients and we'll get part of the access to an additional 300000 potential annual infusions, bringing our total potential additional infusions from new drugs to one 2 million three years post launch.
Linda Barbie: And beyond.
We are excited by the progress we have made in 2024 across our strategic initiatives and our team is engaged and focused to deliver on a strong 2025.
Linda Barbie: I will now turn the call over to Tom to review, our equally strong financial results.
Speaker Change: Each of these opportunities reflect our continued commitment to expand into new therapy areas. While also maintaining our advantage and our core business I'm very excited for the potential that each of these 15 collaborations brings to the table as they near launch and commercial revenue opportunity for <unk> and 2020 six.
Tom: Thanks Linda.
Tom: Starting with our fourth quarter results, we had an excellent finish to the year delivering $8 8 million in revenues, representing 23% growth over the prior year period.
Tom: Our domestic core revenues were $6 7 million.
20% increase over the prior year as our growth continues to outpace the overall market.
Speaker Change: And beyond.
Speaker Change: We are excited by the progress we have made in 2024 across our strategic initiatives and our team is engaged and focused to deliver on a strong 2025.
Tom: Strong performance was driven by growth in both consumable and pump volumes as a result of new patient starts.
Tom: And market share gains during the quarter.
Speaker Change: I will now turn the call over to Tom to review, our equally strong financial results.
And the international core business, we delivered strong revenues of $1 5 million representing growth of 14% over the prior year.
Tom Adams: Thanks Linda.
Tom Adams: Starting with our fourth quarter results, we had an excellent finish to the year delivering $8 8 million in revenues, representing 23% growth over the prior year period.
Tom: Growth was driven by continued penetration of our established markets as well as geographic expansion into new territories.
Tom: Novel therapies revenues were 700000 or 122% growth over the prior year.
Tom Adams: Our domestic core revenues were $6 7 million.
20% increase over the prior year as our growth continues to outpace the overall market.
Tom: The growth was driven by continued progress on our <unk> pipeline with an increased number of collaborations generating energy service revenue and related clinical trial product growth.
Tom Adams: Strong performance was driven by growth in both consumable and pump volumes as a result of new patient starts.
Tom: Moving over to our full year results, we delivered strong performance with $33 6 million in revenues, representing 18% growth over the prior year, our domestic core revenues were $25.
Tom Adams: And market share gains during the quarter.
Tom Adams: In the international core business, we delivered strong revenues of $1 5 million representing growth of 14% over the prior year.
Tom Adams: Growth was driven by continued penetration in our established markets as well as geographic expansion into new territories.
Tom: $2 million, a 12% increase over the prior year outpacing <unk> growth.
Tom: Domestic core was driven by strong pump and consumable volume growth driven by the share gains in new and existing accounts.
Tom Adams: Novel therapies revenues were 700000 or 122% growth over the prior year.
Tom Adams: So growth was driven by continued progress on our pipeline with an increased number of collaborations generating energy service revenue and related clinical trial product right.
Tom: International core revenues were $6 million, representing growth of 32% year over year.
Tom: Growth in our international business was driven by consistent supply overall market growth consumable growth across both new and existing markets and strong performance in newly entered geographies.
Tom Adams: Moving over to our full year results, we delivered strong performance with $33 6 million in revenues, representing 18% growth over the prior year, our domestic core revenues were 25.
Our novel therapies revenues were $2 4 million compared to $1 5 million in the prior year also representing 62% growth rare.
Tom Adams: Point 2, million% to 12% increase over the prior year outpacing skeg micro <unk>.
Tom: Revenue growth was driven by an increased number of NRG collaborations and increased clinical trial product revenue.
Tom Adams: Domestic core was driven by strong pump and consumable volume growth driven by the share gains in new and existing accounts.
Tom: Moving to our gross margin performance fourth quarter gross margins were 62, 9%, a 260 basis point improvement over the prior year.
Tom Adams: International core revenues were 6 million representing growth of 32% year over year.
Tom Adams: Growth in our international business was driven by consistent scaling supply overall market growth consumable growth across both new and existing markets and strong performance in newly entered geographies.
Tom: Expansion was driven by manufacturing efficiencies as well as favorable customer sales mix, resulting in higher asps.
Tom: Our gross margin performance of greater than 6% remains consistent throughout 2024.
Tom Adams: Our novel therapies revenues were $2 4 million compared to $1 5 million in the prior year also represented 62% growth.
Tom: Full year margins were 63, 4%, representing a 480 basis point improvement year over year.
Revenue growth was driven by an increased number of N. R E collaborations and increased clinical trial product revenue.
Tom: And finishing with our full year guidance expectations. The margin improvement was driven by increased manufacturing productivity.
Moving to our gross margin performance fourth quarter gross margins were 62, 9%, a 260 basis point improvement over the prior year margin expansion was driven by manufacturing efficiencies as well as favorable customer sales mix, resulting in higher asps.
Tom: Favorable revenue mix and increases in our Asps. We also have successfully mitigated supply chain cost increases on raw materials during the year.
Tom: Turning to cash as previously announced we finished the year with $9 $6 million in cash balance representing a gain of $800000 during the fourth quarter and exceeding our guidance of at least $8 8 million.
Tom Adams: Our gross margin performance of greater than 6% remains consistent throughout 2024.
Tom Adams: Full year margins were 63, 4%, representing a 480 basis point improvement year over year.
Tom: Our cash usage included a $1 6 million net loss significantly down from the prior year and 300000 of investments and equipment for our next generation consumable product production line.
Tom Adams: And finishing with our full year guidance expectations. The margin improvement was driven by increased manufacturing productivity.
Tom Adams: Favorable revenue mix and increases in our Asps. We also successfully mitigated supply chain cost increases on raw materials during the year.
Tom: This cash usage was offset by working capital improvements of $1 6 million driven by lower inventory and higher accrued expenses, which was partially offset by higher accounts receivable from increased sales.
Tom Adams: Turning to cash as previously announced we finished the year with $9 $6 million in cash balance representing a gain of $800000 during the fourth quarter and exceeding our guidance of at least $8 8 million.
Tom: Additionally, noncash items of $1 million for stock compensation, depreciation and amortization contributed towards our positive fourth quarter cash flow.
Tom Adams: Our cash usage included a $1 6 million net loss significantly down from the prior year and 300000 of investments and equipment for our next generation consumable product production line.
Tom: Moving to slide 14, as we take a look at our cash over the last three years, we significantly reduced our cash burn with usage of $1 9 million in 2024, 68% improvement compared with 23.
Tom Adams: This cash usage was offset by working capital improvements of $1 6 million driven by lower inventory and higher accrued expenses, which was partially offset by higher accounts receivable from increased sales.
Tom: The improvement in cash burn was driven by lower net losses, resulting from higher revenues improved gross margins and operating expense leverage other contributors were improvements in working capital.
Tom Adams: Additionally, noncash items of $1 million for stock compensation, depreciation and amortization contributed towards our positive fourth quarter cash flow.
Tom: Cash burn finished ahead of our $8 8 million and.
Tom: And then cash balance target was 800000 of positive cash flow in the fourth quarter. As a reminder, this cash balance is exclusive of our long term credit facilities that remains unused.
Tom Adams: Moving to slide 14, as we take a look at our cash over the last three years, we significantly reduced our cash burn with usage of $1 9 million in 2024, 68% improvement compared to 23.
Tom: Yeah.
Tom: We were pleased with the strong performance across our P&L and balance sheet as I mentioned before we delivered high teens year over year growth in revenues and nearly 500 basis points improvement in gross margins, while controlling our operating expenses with a 3% increase.
The improvement in cash burn was driven by lower net losses, resulting from higher revenues improved gross margins and operating expense leverage other contributors were improvements in working capital.
Tom: With a significant amount of operating investments behind us in the last three years, we are running a disciplined use of capital across our highest growth drivers and opportunities achieving operating leverage and driving the business towards profitability.
Tom Adams: Cash burn finished ahead of our $8 8 million and.
Tom Adams: And then cash balance target with 800000 of positive cash flow in the fourth quarter. As a reminder, this cash balance is exclusive of our long term credit facilities that remains unused.
Tom: We also delivered a 56 improvement in the net loss and EPS in the 68% improvement in cash burn.
Tom Adams: Yeah.
Tom Adams: We were pleased with the strong performance across our P&L and balance sheet as I mentioned before we delivered high teens year over year growth in revenues and nearly 500 basis points improvement in gross margins, while controlling our operating expenses with a 3% increase.
Please note that 2023 net loss and EPS include a onetime noncash valuation allowance against deferred tax assets of $4 million.
Tom: As Linda mentioned earlier in the call starting in the first quarter of 2025, we will be renaming our novel therapy segment to pharma services and clinical trials to.
With a significant amount of operating investments behind us in the last three years, we are running a disciplined use of capital across our highest growth drivers and opportunities achieving operating leverage and driving the business towards profitability.
Tom: To better reflect the nonrecurring nature of the business and the service revenues.
They continue to use the term novel therapies going forward, but it will be reserves, specifically for new drugs in our pipeline opportunities.
Tom Adams: We also delivered a 56 improvement in the net loss and EPS and a 68% improvement in cash burn.
Tom: The name change will have no impact from a composition of our business on.
Tom Adams: Please note that 2023 net loss and EPS include a onetime noncash valuation allowance against deferred tax assets of 4 million.
Tom: The preparation or disclosure of our financial information by business or on previously reported financial statements.
Tom Adams: Yeah.
Tom: As you can see currently our core business is predominantly AIG drugs with 90% of our total revenues coming from that drug class as we continue to add new drugs onto our label. The 90 10 split will change and then on <unk> drugs category will increase once a drug collaboration and our pipeline is approved.
Tom Adams: As Linda mentioned earlier in the call starting in the first quarter of 2025, we will be renaming our novel therapy segment to pharma services and clinical trials.
Tom Adams: Better reflect the nonrecurring nature of the business and the service revenues. We may continue to use the term novel therapies going forward.
Tom Adams: But it would be reserve, specifically for new drugs in our pipeline opportunities there.
Tom: For use on our freedom system any associated sales going forward it becomes part of the core.
Tom Adams: Name change will have no impact on the composition of our business on.
Tom: Looking ahead to 2025.
Tom Adams: The preparation or disclosure of our financial information by business. We're on previously reported financial statements as.
Tom: We are initiating revenue guidance in the range of $38 million to $39 million, representing 13% to 16% growth.
Tom Adams: As you can see currently our core business is predominantly I G drugs with 90% of our total revenues coming from that drug class as we continue to add new drugs onshore label.
Tom: With this range, we expect sequential quarterly growth throughout the year as our business ramps.
Tom: Key drivers behind these estimates include sustained global <unk> market growth in the 8% to 10% range continued domestic and international share gains.
Speaker Change: 90, 10 split will change and then on Iag's drugs category will increase once a drug collaboration and our pipeline is approved for use on our freedom system any associated sales going forward it becomes part of the core.
Tom: Our flow control product line extension.
Tom: Japanese market entry and the additional of three new collaborations through our novel therapy pipeline.
Tom Adams: Yeah.
Tom Adams: Looking ahead to 2025.
Tom: We expect our gross margins to remain relatively flat to 2024 and range between 61% to 63%.
Tom Adams: We are initiating revenue guidance in the range of $38 million to $39 million, representing 13% to 16% growth.
Tom Adams: With this range, we expect sequential quarterly growth throughout the year as our business ramps.
Tom: Our gross margin will be affected this year by one time product line costs associated with our manufacturing ramp up in the second half in preparation for our new consumables launch some.
Tom Adams: Key drivers behind these estimates include sustained global scale market growth in the 8% to 10% range continued domestic and international share gains.
Tom: Some impact due to a higher mix of sales in international markets.
Tom: In supply chain inflationary and tariff related pressures. Despite these pressures, we continue with planned pricing and manufacturing efficiencies through our operational excellence programs throughout the year to maintain our current margin profile and mitigate the onetime impacts.
Tom Adams: Our flow control product line extension.
Tom Adams: Japanese market entry and the additional of three new collaborations to our novel therapy pipeline.
Tom Adams: We expect our gross margins to remain relatively flat to 2024 and range between 61% to 63%.
Tom: Moving to cash we are reiterating that we expect to be operational cash flow positive for the full year of 2025, we anticipate operating expenses exclusive of stock comp.
Tom Adams: Our gross margin will be affected this year by one time product line costs associated with our manufacturing ramp up in the second half in preparation for our new consumables launch.
Some impact due to a higher mix of sales in international markets.
Tom: <unk> in the range of $26 million to $27 million.
Tom Adams: And supply chain inflationary and tariff related pressures. Despite these pressures, we continue with planned pricing and manufacturing efficiencies through our operational excellence programs throughout the year to maintain our current margin profile and mitigate the onetime impacts.
Tom: Our operating expenses will be weighted more heavily in the first half of the year due to higher R&D costs and project work completion.
Tom: Additionally, we expect there to be less than 2 million.
Of investments in capital equipment, driven primarily by the production lines, we are setting up for our next generation products.
Moving to cash we are reiterating that we expect to be operational cash flow positive for the full year of 2025, we anticipate operating expenses exclusive of stock comp.
Tom: In summary, a strong year in 2024 supports our guidance of mid teen double digit revenue growth stable gross margins and our expectations to be cash flow positive for the year.
I'll now pass the call back to Linda to review New products, our 2025 milestones and for some closing remarks. Thanks Tom.
Session in the range of $26 million to $27 million.
Our operating expenses will be weighted more heavily in the first half of the year due to higher R&D costs and project work completion.
Linda Barbie: Over the last several years, we have invested in our innovation capabilities and we are excited by the pending launch of three new products over the next year. These are all focused on an offering increased convenience.
Tom Adams: Additionally, we expect there to be less than $2 million of investments in capital equipment, driven primarily by the production lines. We are setting up for our next generation products.
<unk> savings and improved patient comfort for the patients and clinicians that use our products every day in the home and in the clinic.
Tom Adams: In summary, a strong year in 2024 supports our guidance of mid teen double digit revenue growth stable gross margins and our expectations to be cash flow positive for the year.
Linda Barbie: Starting with the flow controller. This is a product we offer today in very selected geographies in the EU that allow clinicians and patients the ability to adjust flow rate with an easy to use style.
Speaker Change: I'll now pass the call back to Linda to review New products, our 2025 milestones and for some closing remarks. Thanks Tom.
Linda Barbie: <unk> to rollout the device in two phases first phase of a line extension that does not require an updated 500 10-K submission and is expected to launch in Q3 with an improved cost of goods sold an increase in overall production capacity, allowing us to expand to new geographies.
Linda Tharby: Over the last several years, we have invested in our innovation capabilities and we are excited by the pending launch of three new products over the next year. These are all focused on an offering increased convenience.
Linda Tharby: <unk> savings and improved patient comfort for the patients and clinicians that use our products every day in the home and in the clinic.
The second phase is our next generation product, which will have a five 10-K submission in the first quarter of 2026.
Linda Tharby: Starting with the flow controller. This the product we offer today in very selected geographies in the EU that allow clinicians and patients the ability to adjust flow rate with an easy to use style.
New products will come with increased performance and accuracy compared to our current offerings and allow <unk> to pursue expanded label indications and enter new markets. Our second pending launch is our new consumables product that is planned to be submitted to the FDA in the second half of 2025.
Linda Tharby: Plan to rollout the device in two phases. The first phase was a line extension that does not require an updated five 10-K submission and is expected to launch in Q3 with an improved cost of goods salt and increase in overall production capacity, allowing us to expand to new geographies.
Linda Barbie: The product features compatibility for an expanded range of flow rates and dosage sizes, while also having a simplified user interface and providing increased comfort during infusion.
Linda Tharby: <unk> phase is our next generation product, which will have a five 10-K submission in the first quarter of 2026, the new product will come with increased performance and accuracy compared to our current offering and allow <unk> to pursue expanded.
Customizable platform will be compatible with mechanical Andy pumps, allowing us to better serve new and existing markets as we add new drug classes to our label and continue our collaborations with pharma companies developing new drug therapies.
Linda Tharby: Labour indications and enter new markets are.
Linda Barbie: We plan to submit the next generation scape pump for 501 K clearance between the end of 2025 and 2020 and early 2026.
Linda Tharby: Our second pending launch is our new consumables product. It is planned to be submitted to the FDA in the second half of 2020 five.
Linda Barbie: This pump features the class capability to accommodate all sizes of Prefilled syringes, ranging from five to 50 ml, allowing patients and clinicians have all doses schedules to use our products. Additionally, the pompe is a seamless removal unloading system that enables patients with large dosing sizes requiring multiple syringes.
Linda Tharby: <unk> features compatibility for an expanded range of flow rates and dosage sizes, while also having a simplified user interface and providing increased comfort during infusion.
Linda Tharby: The customizable platform will be compatible with mechanical Andy pumps, allowing us to better serve new and existing markets as we add new drug classes to our label and continue our collaborations with pharma companies developing new drug therapies.
Linda Barbie: To load without interrupting their infusions.
Linda Barbie: The pump will also offer enhanced mobility ease of use and patient feedback features that improve on the overall user experience.
Linda Tharby: We plan to submit the next generation skip pump for 501 K clearance between the end of 2025, and 2020 and early 'twenty 'twenty sets.
Linda Barbie: The next generation product will allow <unk> to penetrate new markets that are rapidly converting to pre filled syringe drug administration, which serve as a significant growth opportunity for the company.
Linda Tharby: This pump features the class capability to accommodate all sizes are pretty sell trenches ranging from five to 50 ml, allowing patients and clinicians have all doses schedules to use our products. Additionally, the pompe is a seamless removal unloading system that enables patients with large dosing sizes requiring multiple fringes.
Linda Barbie: The flow controller will serve as a growth driver in the second half of 2025 with a pump and consumables driving inflection for the whole year 2006, as they are cleared and launched as quarters next generation infusion system.
Linda Tharby: The load without interrupting their infusions.
Linda Barbie: Now I'd like to turn to our key 2025 milestones. These are the.
Linda Tharby: The pump will also offer enhanced mobility ease of use and patient feedback features that improve on the overall user experience.
Linda Barbie: <unk> performance indicators that we have detailed throughout the presentation today for financial and guidance targets as well as for each of our three strategic business areas.
Linda Tharby: The next generation product will allow us to penetrate new markets that are rapidly converting should prebuilt French drug administration, which serve as a significant growth opportunity for the company.
Linda Barbie: As he our progresses, we plan to provide updates through both press releases and our quarterly earnings calls as a way to measure our progress against each of the goals we have set for the year.
Linda Tharby: The blow controller will serve as a growth driver in the second half of 2025 with a pump and consumable drive inflection for the full year 'twenty as are cleared and launched as quarters next generation infusion system.
Linda Barbie: 2025 is a pivotal year for <unk> as we continue to execute on our business strategy to become a global leader in large volume subcutaneous drug delivery and position ourselves to capitalize on the opportunities in this large and growing market.
Linda Tharby: Now I'd like to turn to our key 2025 milestones. These are the specific performance indicators that we have detailed throughout the presentation today for financial and guidance targets as well as for each of our three strategic business areas.
Linda Barbie: To our customers shareholders patients and team members, who have all made 2020 for a great year and positioned us for further success in 2025.
Linda Tharby: As he our progresses, we plan to provide updates through both press releases and our quarterly earnings calls as a way to measure our progress against each of the goals we have set for the year.
Linda Barbie: We'll now open the line for your questions.
Linda Barbie: Thank you we will now be conducting a question answer session.
Linda Barbie: Like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question queue.
Linda Tharby: 2025 is a pivotal year for <unk> as we continued to execute on our business strategy to become a global leader in large volume subcutaneous drug delivery and position ourselves to capitalize on the opportunities in this large and growing market.
Linda Barbie: Press Star two to remove yourself from the queue.
Linda Barbie: Do ask that you limit yourself to one question and one follow up.
Linda Barbie: For participants using speaker equipment that may be necessary to pick up the handset before pressing star teams one moment, while we poll for questions.
Linda Tharby: To our customers shareholders patients and team members, who have all made 'twenty 'twenty for a great year and positioned us for further success in 2025.
Speaker Change: And our first question comes from Chase Knickerbocker with Craig Hallum Capital Group. Please proceed.
Linda Tharby: Well now open the line for your questions.
Good afternoon, and thanks for taking the questions and.
Linda Tharby: Yeah.
Speaker Change: Thank you we will now be conducting a question and answer session.
Speaker Change: That's again on a great quarter.
Speaker Change: I'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question queue.
Speaker Change: Maybe just first on 25 guidance, Tom if you could break it down just a little bit more for us on kind of your growth assumptions specifically.
Speaker Change: You May press star two to remove yourself from the queue.
Speaker Change: Domestic and international and then kind of what contribution you expect from pharma services and clinical trials in the year can be a bit lumpy and sometimes hard for us to model, so kind of a breakdown would be nice.
Speaker Change: Do ask that you limit yourself to one question and one follow up.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up the handset before pressing star Ts one moment, while we poll for questions.
Speaker Change: Yeah. Thanks for the question Chase, Yes. The way we are looking at our guidance from a domestic standpoint, you can expect between 10 and 15% revenue growth from an international perspective, we expect over 20%.
Speaker Change: And our first question comes from Chase Knickerbocker with Craig Hallum Capital Group. Please proceed.
Speaker Change: Good afternoon, and thanks for taking the questions and congrats again on a great quarter, maybe just first on 25 guidance. Tom If you could break it down just a little bit more for us on kind of your growth assumptions specifically.
Speaker Change: We continue to expand in that region, so 20% being the minimum and then from a novel therapies standpoint, you can always expect we've seen around $2 million to $3 million.
Speaker Change: Domestic and international and then kind of what contribution you expect from pharma services and clinical trials in the year can be a bit lumpy and sometimes hard for us to model, so kind of a breakdown would be nice.
Speaker Change: Between our energy and our clinical product sales of revenue for the year.
Got it and then just on the domestic side and then internationally as well I mean, that's kind of help us think about the breakdown between kind of call it new wins on that kind of expansion.
Tom Adams: Yeah. Thanks for the question Chase Yeah. The way we were looking at our guidance from a domestic standpoint, you can expect between 10 and 15% revenue growth from an international perspective, we expect over 20%.
Speaker Change: Other drugs and other opportunities versus kind of just continued share taking with him.
Tom Adams: We continue to expand in that region, so 20% being the minimum and then from a novel therapies standpoint, you can always expect we've seen around $2 million to $3 million.
<unk> drugs in existing indications.
<unk> in 2025 to both domestically and internationally kind of what drives the above market growth kind of as a share of those two.
Tom Adams: Between our end already in our clinical product sales revenue for the year.
Speaker Change: Yeah. So let me start with the exciting part which should be the international.
Okay.
Speaker Change: Space. So as you can see what the performance that we had last year, we entered into many new geographies.
Tom Adams: Got it and then just on the domestic side and then internationally as well I mean, that's kind of help us think about the breakdown between kind of call it new wins on and kind of expansion.
Speaker Change: As we think about those new geographies and the <unk> impacts of those geographies, we see some nice upside with.
Tom Adams: Other drugs and other opportunities versus kind of just continued share taking them with existing drugs and existing indications.
Speaker Change: With those markets in addition.
Speaker Change: Some of the new some of the new geographies, we're entering into such as Japan.
Speaker Change: And in some other countries that we are continuing to expand on we expect to see some nice upside.
In 2025, both domestically and internationally kind of what drives the above market growth kind of as a share of those two.
Speaker Change: Those areas and just to note two we do expect sequential growth from a cadence perspective.
Tom Adams: Yeah. So let me start with the exciting part which should be the international.
Speaker Change: Quarterly sequential growth in the in those in that geography.
Tom Adams: Space. So as you can see what the performance that we had last year, we entered into many new geographies.
Speaker Change: From an O U S standpoint, yeah, we continue to push.
Tom Adams: As we think about those new geographies and the <unk> impact of those geographies, we see some nice upside with.
Speaker Change: We continue to add.
Speaker Change: New new customers through our distribution accounts.
With those markets in addition.
Speaker Change: We have seen a nice nice traction since last year.
Tom Adams: Some of the new some of the new geographies, we're entering into such as Japan.
Speaker Change: Spectrum market growth as Linda mentioned earlier in the remarks.
Tom Adams: And in some other countries that we are continue to expand on we expect to see some nice upside.
Diagnosis of infections have gone up.
The market is still very strong heading into the first quarter here. So we continue to see.
Tom Adams: Those areas and just to note two we do expect sequential growth from a cadence perspective.
Speaker Change: Some nice upside in the U S as well.
Tom Adams: Quarterly sequential growth in the in those in that geography.
Speaker Change: And then maybe just.
Speaker Change: Tom said, Oh, you asked but I think he meant to say U S market and in his last set of remarks, the only thing that I would add Tom excellent summary is that we continue to see increased traction Oh, you asked with R. E pump collaborations with our needle set that is driving some significant growth for us.
Tom Adams: From an O U S standpoint, yeah, we continue to push.
Tom Adams: We continue to add and new new customers through our distribution accounts.
Tom Adams: We haven't seen a nice nice traction since last year with respect to market growth as Linda mentioned earlier in the in the in the remarks, you know diagnosis of infections have gone up.
Speaker Change: With the commercial team Theyre really focusing in on that in the back half of 'twenty four and we've seen some nice progress in 2025 in that area.
Tom Adams: The market is still very strong heading into the first quarter here. So we continue to see.
Tom Adams: Some nice upside in the U S as well.
So.
Speaker Change: Helpful. And then just if I could sneak one more in on the on the oncology.
Speaker Change: Well, maybe just just Tom said, Oh, you asked but I think he meant to say U S market and in his last set of remarks, the only thing that I would add Tom excellent summary is that we continue to see increased traction Oh, you asked with R. E pump collaborations with our needle such that it's driving.
Speaker Change: <unk> can you remember remind us what's left to do on the filing there and when when we could be.
Speaker Change: And the and the infusion clinic there.
Yeah, I would say on the filing we actually feel pretty confident about what it takes to get an FDA approval here more of the work. We're doing is on the market assessment side.
Tom Adams: Some significant growth for us.
Tom Adams: With the commercial team Theyre really focusing in on that in the back half of 'twenty four and we've seen some nice progress.
So we've got three things, we're looking at proving out here our value proposition the product and saving nursing time, increasing patient satisfaction. So we're actively working today with clinics to generate that data.
2025 in that area.
So.
Speaker Change: Helpful. And then just if I could sneak one more in on the on the oncology.
Speaker Change: Opportunity can you remember remind us what's left to do on the filing there and when when we could be any in the infusion clinic there.
This understanding reimbursement and ensuring that.
The increase in cost that we see about $10 on average per infusion.
Speaker Change: Yeah, I would say on the filing we actually feel pretty confident about what it takes to get an FDA approval here more of the work. We're doing is on the market assessment side. So we got three things. We're looking at proving out here are our value proposition you know the product and saving nursing.
Speaker Change: Can be absorbed within with reimbursement and also that it.
Speaker Change: That would drive the savings and efficiencies in the clinic that we are anticipating and then the third is establishing a new distribution partner for ourselves in the U S market, making good progress on all of those and look forward to giving you updates as the year progresses.
Speaker Change: Time, increasing patient satisfaction. So we're actively working today with clinics to generate that data second is understanding reimbursement and ensuring that.
Speaker Change: Thanks.
Speaker Change: Thank you.
The increase in cost that we see about $10 on average per infusion can.
And our next question comes from the Frank talk now with Lake Street Capital Markets. Please proceed with your question.
Can be absorbed within with reimbursement and also that it that it drives the savings and efficiencies in the clinic that we are anticipating and then the third is establishing a new distribution partner for ourselves.
Speaker Change: Great. Thanks for taking the questions congrats on a really solid finish to the year.
Was hoping we could talk a little bit more about the core domestic business clearly that business outperformed really well in the fourth quarter I don't think we've seen you outperform market growth as much as you did this quarter. So I'm just curious if there was something different.
Speaker Change: Market, making good progress on all of those and look forward to giving you updates as the year.
Speaker Change: Different that occurred.
Speaker Change: For breakfast.
Be allowing you to take more market share in the 20% growth.
Speaker Change: Thanks.
Speaker Change: 20% plus growth in the core business is something that you could you could replicate.
Speaker Change: Thank you.
Speaker Change: And our next question comes from of Frank <unk> with Lake Street Capital markets. Please proceed with your question.
Speaker Change: Beyond kind of your thoughts around the 10% to 15% growth that you've laid out.
Great. Thanks for taking questions. Congrats on a really solid finish to the year I was hoping we could talk a little bit more about the core domestic business clearly that business all performed really well in the fourth quarter I don't think we've seen you outperform market growth as much as you did this quarter. So I'm just curious if there was something.
Speaker Change: Yes.
Speaker Change: So first I would say that the team has been focused all year on really.
Speaker Change: Go to market model, where they use some AI to understand which accounts to to call an end to further focus on for increased penetration.
Speaker Change: That led to some nice growth opportunity for us that that picked up in carriage team throughout the year. We also.
Speaker Change: That occurred that in that case, maybe allowing you to take more market share and if that 20% growth, 20% plus growth in the core business is something that you couldn't you could replicate beyond kind of your thoughts around that 10% to 15% growth that you've laid out.
Speaker Change: Signed some new agreements with.
Speaker Change: Some some of our accounts, which are preferred <unk> for their new patient starts. So I think we're seeing some some uptick relative to that.
Speaker Change: Yeah.
Speaker Change: So first I would say that the team has been focused all year on really a go to market model where they.
Speaker Change: We had a little bit of price impact in the fourth quarter that we carried from a price increase we did.
In July of this year, so all of those things combined.
Speaker Change: They use some AI to understand which accounts to to call an end to further focus on for increased penetration.
We are extremely pleased with as you know our U S business is the biggest part of our business and.
Speaker Change: That led to some nice growth opportunity for us that that picked up and carried steam throughout the year. We also.
Speaker Change: The overall market growth continuing to accelerate accelerated each quarter and I don't know about you, but everyone. I know has had been sick.
Speaker Change: Signed some new agreements with.
Some some of our accounts, which are preferred corio farther new patient starts. So I think we're seeing some some uptick relative to that.
Speaker Change: For a long period of time this season and of course, well, while we don't like that for.
Speaker Change: We had a little bit of price impact in the fourth quarter that we carried from the price increase we did.
Speaker Change: For humans, we it is good for our business because in increased infections lead to increased diagnosis.
Speaker Change: In July of this year, so all of those things combined.
Speaker Change: Of immune deficient populations and that is really we're seeing a lot of uptick there. So as part of your question.
Speaker Change: We are extremely pleased with as you know our U S business is the biggest part of our business and the overall market growth continuing to accelerate accelerated each quarter.
Speaker Change: While we can anticipate 20% growth, we do feel confident in that.
Speaker Change: 10% to 15% growth.
Ongoing for this is an area, but it's an area. We'll watch for continued upside which could be driven by continued market growth beyond the 10% level, 8% to 10% is in our guidance and also based upon new account wins that we could see.
Speaker Change: I don't know about you, but everyone I know has had been set up.
Speaker Change: For a long period of time this season in and of course, well, while we don't like that for.
Speaker Change: For humans, we we it is good for our business because in increased infections lead to increase diagnosis.
Speaker Change: Other immune deficient populations and that is really we're seeing a lot of uptick there. So as part of your question well, we can't anticipate 20% growth, we do feel confident in that.
Speaker Change: Would drive increased U S performance.
Speaker Change: Okay really helpful, maybe talking a little bit more about the <unk> pump opportunity.
Speaker Change: Maybe explain that market a little bit more to us in relation to kind of where you feel your penetration is into that.
10% to 15% growth.
Speaker Change: Ongoing for this is an area, but it's an area. We'll watch for continued upside which could be driven by continued S. P. I G market growth beyond the 10% level, 8% to 10% is in our guidance and also based upon new account wins that we could see would drive.
Speaker Change: Partnering your disposable with existing <unk> pumps out there.
Speaker Change: And maybe an analogy in what inning, we're in and to your penetration in that with the kind of help us understand how much more there is to go in penetrating that heat pump opportunity.
Speaker Change: Sure. So maybe just as context in Europe. The subcutaneous market is dominated by E pumps, we have our mechanical pumps in one region, which is the Nordic region, where that therapy tends to dominate driven by a K O L that started with.
Speaker Change: Increased U S performance.
Speaker Change: Okay really helpful, maybe talking a little bit more about the E pump opportunity.
Maybe explain that market a little bit more to us in relation to kind of where you feel your penetration is into that.
Speaker Change: Mechanical pumps several years ago.
Speaker Change: Partnering your disposable with existing <unk> pumps out there and maybe an analogy in what inning, we're in and to your penetration in that with the kind of help us understand how much more there is to go in penetrating that heat pump opportunity.
Speaker Change: In the remainder of the markets I think.
Speaker Change: Kudos to our commercial team really.
Speaker Change: Said this year lets try to forge new partnerships.
And go after the consumables, which really drive at 85% of our business. So that strategy I would say, we really started in earnest in.
Speaker Change: Sure. So maybe just as context in Europe.
<unk> market is dominated by E pumps, we have our mechanical pumps in one region, which is the Nordic region, where that therapy tends to dominate driven by a K O L that started with mechanical pumps are several years ago in the remainder of the markets I think.
Speaker Change: <unk>.
Speaker Change: Second quarter of last year, So I'd say, we're in the early innings.
Speaker Change: And we see it as a potential significant growth driver for us moving forward we've already seen.
Speaker Change: Upsides.
Speaker Change: Our numbers that we are anticipating in in 2024. It had some some nice wins early in 2025 in that area and as I said, we have.
Speaker Change:
Speaker Change: Kudos to our commercial team really.
Said this year lets try to forge new partnerships and go after the consumables, which really drive at 85% of our business. So that strategy I would say, we really started in earnest in about.
Speaker Change: Just over 10% market share so a lot of room to grow there are into that population none of those manufacturers have their own consumables.
Speaker Change: So happy to partner with us and with our new consumables launch, we think we'll have opportunity for even more upside.
Speaker Change: Second quarter of last year, So I'd say, we're in the early innings and we see it as a potential significant growth driver for us moving forward, we've already seen upside.
Speaker Change: Okay, Great and then just maybe one last one on gross margin.
Speaker Change: Upsides.
Speaker Change: To our numbers that we were anticipating in in 'twenty 'twenty four you had some some nice wins early in 2025 in that area.
Speaker Change: Maybe to think about gross margin a little bit longer term I heard the comments about there are some one time expenses related to the scale up.
Speaker Change: And this year, maybe longer term, how do you feel the new product portfolio allows you to expand gross margins and where could we see that shake out over time.
And as I said you know, we we have you know.
Speaker Change: Just over 10% market share so a lot of room to grow there are into that population none of those manufacturers have their own consumables.
Speaker Change: Yeah, maybe I'll start and then I'll hand, it to Tom.
Speaker Change: So one of the things. We're most excited about is our new consumables launch we work really hard on.
So happy to partner with us and with our new consumables launch, we think we'll have opportunity for even more upside.
Speaker Change: Increasing efficiencies driven primarily through automation as we ramp to that line. So we expect that that news.
Speaker Change: Okay, Great and then just maybe one last one on gross margin.
Speaker Change: Maybe to think about gross margin a little bit longer term I heard the comments about there was some one time expenses related to the scale up.
Speaker Change: News manufacturing strategy will drive us to.
Speaker Change: That 65% plus gross margin.
Speaker Change: And this year, maybe longer term, how do you feel that the new product portfolio allows you to expand gross margins and where could we see that shake out over time.
Speaker Change: Range Tom.
Speaker Change: TAMO.
Frank: And he said the comment yeah and of course and of course, Frank we are constantly re.
Speaker Change: Reviewing our manufacturing footprint.
Tom Adams: Yeah, maybe I'll start and then I'll hand, it to Tom.
Frank: We have operational excellence programs.
Speaker Change: So one of the things. We're most excited about is our new consumables launch we worked really hard on.
Frank: So yield improvements we're constantly be looked at as we grow in size and we sell more volume we will continue to find margin improvements within our manufacturing space and then of course, there's one I mentioned with the new product launches that are coming out.
Increasing efficiencies driven primarily through automation as we ramp to that line. So we expect that that news manufacturing strategy will drive us to that 65% plus gross margin range.
Frank: We expect the house.
Frank: Price premium on those products.
Frank: On the longer term okay.
Speaker Change: Got it that's helpful. Thanks.
Tom Adams: Range Tom.
Tom I know you said the comment yeah and of course and of course, Frank we are constantly reviewing our manufacturing footprint, we have operational excellence programs and so yield improvements are constantly being looked at as we grow in size and we sell more volume we will continue to to find margin improvement.
Frank: Okay.
Frank: Yes.
Frank: Thank you.
Speaker Change: Our next question comes from Jason Bednar with Piper Sandler. Please proceed with your questions.
Jason Bednar: Hey, good afternoon.
Speaker Change: Linda I want to start with I think you made some comments just on the press release here today.
Speaker Change: The strength that you had in 'twenty four continued into 'twenty five, but it's really good to hear.
Within our manufacturing space and then of course, there's one I mentioned with the new product launches that are coming out.
Speaker Change: Excuse me, but your guidance is calling for a deceleration in revenue growth versus 24.
Tom Adams: We expect to have some.
Tom Adams: Some price premium on those products.
Tom Adams: On the longer term okay.
Speaker Change: And also versus where you finished in the fourth quarter. So I guess, how should we reconcile those comments that you made.
Tom Adams: Got it that's helpful. Thanks.
Tom Adams: Okay.
Speaker Change: Thank you. Our next question comes from Jason Bednar with Piper Sandler. Please proceed with your question.
Speaker Change: With them you know in the complex and our financial guidance.
Speaker Change: And in response to that could you maybe compare and contrast, the factors that are maybe within your control.
Jason Bednar: Hey, good afternoon.
Speaker Change: Versus those that are more market dependent when we think about that $1 million range in your revenue guidance.
Jason Bednar: When do I want to start with I think you've made some comments just on the <unk>.
Press release here today.
So.
Jason Bednar: The strength that you had in 'twenty four continued into 25, it's it's really good to hear.
Speaker Change: What I would say around our guidance is the primary reason for that is due to our novel therapies and and remember that business, we could support a really big trial in 2020 for which we did we had a really big phase III trial that we announced in 2024.
Speaker Change: Excuse me, but your guidance is calling for a deceleration in revenue growth versus 24.
And also versus where you finished in the fourth quarter. So I guess, how should we reconcile those comments that you made.
Speaker Change: Within the context of that financial guidance.
Speaker Change: And that drove significant revenues and you start from ground zero with those revenues every single year. So we anticipate some lumpiness in those revenues in that guidance range that I talked about.
Speaker Change: And in response to that could you maybe compare and contrast, the factors that are maybe within your control.
Speaker Change: Versus those that are more market dependent when we think about that $1 billion range in your revenue guidance.
Speaker Change: With respect to our core business I think our U S business.
Speaker Change: So what I would say around our guidance is the primary reason for that is due to our novel therapies and and remember that business, we could support a really big trial in 'twenty 'twenty four which we did we had a really big phase III trial that we announced in 2024.
Speaker Change: That that we saw grow this year overall in that 12% range as we said to Tom we anticipate increased.
Speaker Change: Increased performance in that area.
Speaker Change: This year and in our O U S business International we expect this year, we saw 30% you know, we're anticipating plus 20% a little bit of a higher base, but that could be opportunity for outperformance. So really the difference. There that you see is is just that novel therapy space and the Lumpiness.
Speaker Change: And that drove significant revenues and you start from ground zero, what those revenues every single year. So we anticipate some lumpiness in those revenues are in that guidance range that I talked about.
With respect to our core business I think our U S business that.
With that we see there, but both other areas of the business, Jason I would say, our stronger and and overall the guidance that we discussed is in line with what we saw in 2024.
Speaker Change: Is that that we saw grow this year overall in that 12% range as we said Tom we anticipate increased.
Increased performance in that area.
Speaker Change: Okay.
Speaker Change: This year and in our O U S business our international we expect this year. We saw 30% you know, we're anticipating plus 20% a little bit of a higher base, but that could be opportunity for outperformance. So really the difference. There that you see is is just that novel therapies based on the Lumpier.
Linda Barbie: Linda Thanks, that's helpful and then maybe the swing factor.
Linda Barbie: High end low end in your guide and how much is in your control versus market dependent.
Linda Barbie: Yeah. Thank you I missed that second part of the question I would say that.
Linda Barbie: First of all the biggest swing factor then of course is our novel therapies revenues and how much we can accelerate into 2025.
Speaker Change: Now that we see there, but both other areas of the business, Jason I would say, our stronger and and overall the guidance that we discussed is in line with what we saw in 2024.
Linda Barbie: Based upon.
Linda Barbie: Various movements with pharmaceutical manufacturers are we feel good about our guidance range today relative to the commitments that we have with pharmaceutical manufacturers and then obviously further international growth and some wins that we haven't anticipated faster growth in Japan become big opportunities for us on the upside.
Linda Tharby: Okay, and then Linda.
Thanks, that's helpful and then maybe the swing factor.
Linda Tharby: High end low end in your guide and how much is in your control versus market dependent.
Linda Tharby: Yeah. Thank you I I missed that second part of the question I would say that.
Linda Barbie: Syed.
Syed: Continued U S market share growth.
Linda Tharby: First of all is the biggest swing factor then of course is our novel therapies revenues and how much we can accelerate into 2025.
Linda Barbie: Is big for Us obviously that.
Linda Barbie: Overall market is not within our control, but based upon all of the earnings reports and forward looking analysis presented by all of the manufacturers. They all grew those franchises and the 15 plus percent range. This year.
Linda Tharby:
Linda Tharby: Based upon you know.
Various movements with pharmaceutical manufacturers are we feel good about our guidance range today relative to the commitments that we have with pharmaceutical manufacturers and then obviously further international growth and some wins that we haven't anticipated faster growth in Japan become big opportunities PRASM.
Linda Barbie: <unk> you.
Linda Barbie: They're all highlighting and as areas for continued growth for them. So we feel quite good.
Linda Barbie: That all that all four of those manufacturers are reporting strong forward looking growth in that market.
Linda Tharby: Outside continued our U S market share growth is big for US obviously that that overall market is not within our control, but based upon all of the earnings reports and forward looking analysis presented by all of the I G manufacturers. They all.
Linda Barbie: Yeah, absolutely I think that's encouraging.
Tom: Tom if I could shift over to you.
Tom: Maybe a couple of questions here and I'll ask them both upfront.
Tom: One as we think about the international expansion that typically this tends to be a working capital use for companies. When they go through this process you got we got more inventory you have to carry have longer receivable terms.
Linda Tharby: All grew those franchises and the 15 plus percent range this year.
Linda Tharby: Which.
Linda Tharby: You know, they're all highlighting and as areas for continued growth for them. So we feel quite good that all that all four of those manufacturers are reporting strong forward looking growth in that AG market.
Is this factored into your view on cash flow positivity for the year.
Tom: And then related to that point the second part of the question is as we transition to this cash flow positivity, which is great to see just how do you think about deployment from here how aggressive do you look to get with internal investments to further support our topline growth and maybe even take some riskier bets out there.
Yeah, absolutely that's good that's encouraging.
Tom Adams: Tom if I could shift over to you.
Tom Adams: Maybe a couple of questions here and I'll ask them both upfront.
Speaker Change: One as we think about the international expansion that typically this tends to be a working capital use for companies. When they go through this process. You got you know we've got more inventory you have to carry you have longer receivable terms.
Yes, Greg Great question, Thanks for that Jason Yeah. So just on the first one in terms of the O U S expansion, it's all within our planning we realized that we grew 30% of our U S. Last year, we do realize the payment terms are generally 15 to 30 days higher than our U S business.
Is this factored into your view on cash flow positivity for the year.
Speaker Change: And then related to that point the second part of the question is as we transition to this cash flow positivity, which is great to see just how do you think about deployment from here how aggressive do you want to get with internal investments to further support our topline growth and maybe even take some riskier bets out there.
Tom: That's all plans and are in our guidance.
Tom: From a growth perspective, so I would say.
Tom: From that perspective, we feel pretty good we feel also pretty good about our inventory levels and the respective planning around.
Speaker Change: Yes, Greg Great question, Thanks for that Jason Yeah. So just on the first one in terms of the O U S expansion thats its all within our planning we realized that we grew 30% O U S. Last year, we do realize that payment terms are generally 15 to 30 days higher than our U S business.
Building those inventories for those markets. So all planned out.
Tom: Part of our.
Tom: Operational cash flow guidance.
From a deployment standpoint of future future capital as we continue to grow.
Tom: Yeah of course, we expect to be operational cash flow breakeven.
Tom: We do have.
Speaker Change: That's all plans and are in our guidance.
Tom: Means to.
Tom: To reinvest.
Speaker Change: From a growth perspective, so I would say.
Tom: To a certain level I would say of cash.
Speaker Change: From that perspective, we feel pretty good we feel also pretty good about our inventory levels and the respective planning around building those inventories for those markets. So all planned out.
Tom: We still hold a.
Tom:
Tom: Our line of credit if needed for for larger ROI opportunities internationally.
Tom: And so we feel with our current strategic plan.
Speaker Change: Part of our.
Speaker Change: Operational cash flow guidance I'd say.
Tom: We have enough capital to deploy in those areas it may be for opportunities obviously.
Speaker Change: Just from a deployment standpoint of future future capital as we continue to grow.
Tom: Very large opportunity that comes our way.
Speaker Change: Yeah of course, we expect to be operational cash flow breakeven, we do have a means to.
Tom: Of course revisit those opportunities in line with our with our debt and in line with any other types of evolve.
Speaker Change: To reinvest up to a certain level I would say of cash.
Categories.
Tom: Alright, very good thank you.
Speaker Change: We still hold a.
Speaker Change: Hum.
A lot of credit if needed for for for larger ROI opportunities internationally.
Tom: Thank you.
And our next question comes from Anderson shock with B Riley Securities. Please proceed with your question.
Speaker Change: And so we feel with our current strategic plan that we have enough capital to deploy in those areas if need be for opportunities. Obviously, if a very large opportunity that comes our way.
Anderson: Alright, congrats on the great quarter and thank you for taking my questions.
Anderson: So first with your agreement with shot pharma is this integrating the next gen pump you're submitting a 500 10-K are submitting for five 10-K clearance later this year with their pre filled syringes or are you developing another pump alongside shot.
Of course revisit those opportunities in line with our with our debt and in line with any other types of about.
So the pump is being developed.
Categories.
Anderson: Okay.
Speaker Change: Alright, very good thank you.
Anderson: Collaboration with shot in so much as a.
Speaker Change: Yeah.
Anderson: They are sharing all of their pipeline relative to pre filled syringe as their sharing all of their advancements in those areas. So that we can ensure the interaction of those syringes with our pump it will be however, a core owned.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Anderson shock with B Riley Securities. Please proceed with your question.
Anderson shock: Hi, Congrats on a great quarter and thank you for taking my questions.
Anderson shock: So first with your agreement with shot pharma is this integrating the next gen pump you're submitting a 500 10-K are submitting for five 10-K clearance later this year with their pre filled syringes or are you developing another pump alongside shot.
Anderson: IP pump and it will be a core is submitted for 500 10-K separate from their pre filled.
Anderson: Submissions.
The real beauty of it is as we get to late early read on everything happening in the pre filled syringe environment.
Anderson shock: So the pump is being developed.
Anderson shock: Okay.
Anderson shock: Collaboration have wished shot in so much as they.
Speaker Change: Okay got it and this is the pump you plan on submitting later this year.
Anderson shock: They are sharing all of their pipeline relative to pre filled syringe as their sharing all of their advancements in those areas. So that we can ensure the interaction of those syringes with our pump it will be however, a core owned IP.
Anderson: Correct later, this year or first quarter of 2026.
Anderson: Okay got it and then will the nextgen consumables be compatible with existing freedom and freedom 60 pumps.
Anderson shock: IP pump and it will be a core is submitted for 500 10-K separate from their pre failed.
Anderson: Stay well.
Anderson: They will be compatible obviously with that and with our new pump.
Anderson: Our new pump will not be compatible with anyone else's consumable.
Anderson shock: Submissions.
Anderson shock: The real beauty of it is as we get to late early read on everything happening in the pre filled syringe environment.
Okay, and then finally, how many of your 50 novel therapy partners right now are in phase III clinical trials.
Okay got it and this is the pump you plan on submitting later this year.
Anderson: That is a great question I'm Gonna have a quick look at <unk>.
Anderson shock: Correct later, this year or first quarter of 2026.
Anderson: But I believe it is for.
Anderson shock: Okay got it and then will the nextgen consumables be compatible with existing freedom and freedom 60 pumps.
Anderson: That we have in there.
Anderson: It could be one more than that let me have a look.
Anderson shock: They well.
Anderson shock: They will be compatible obviously with that and with our new pump, our new pump will not be compatible with anyone else's consumable.
Yes, So 123, sorry, five five in total I missed one of the candidates.
Speaker Change: Okay, and then finally, how many of your 15 novel therapy partners right now are in phase III clinical trials.
Speaker Change: Okay got it thank you for taking our questions and congrats again on all the progress.
Speaker Change: That is a great question I'm and I have a quick look at AR.
Thank you Anderson.
Okay.
Speaker Change: Thank you and our next question comes from Mckool Smith with Canaccord. Please proceed with your question.
But I believe it is for <unk>.
Speaker Change: That that we have in there.
Speaker Change: Hi, everyone as michela filling in for Caitlin Caitlin Cronan today, Thanks for taking the question and congrats on a great quarter and a strong end to the strong into the year and I was wondering if you could talk a little bit about any expected business impacts from tariffs and do you have any thoughts on how the tariffs manufacturer manufacturing and supply chain costs potential headwinds are.
Speaker Change: It could be one more than that let me have a look.
Speaker Change: Yes, so 123, sorry spot five in total I missed one of the candidates.
Speaker Change: Okay got it well thank you for taking our questions and congrats again on all the progress.
Challenges to the O U S business, especially with your focus on expansion.
Anderson shock: Thank you Anderson.
Sure Hi, Michaela I'll take that one so we had we did have a comprehensive review.
Speaker Change: Yeah.
Speaker Change: Thank you.
Louisa Smith: Next question comes from my cable Smith with Canaccord. Please proceed with your question.
Speaker Change: On tariff impacts.
Speaker Change: As you know our assembly production is here in the U S and are considerable production is down in Nicaragua. Those obviously those countries are not impacted.
Speaker Change: I agree one Miss Micaela filling in for Caitlin Caitlin Cronan today. Thanks for taking the question and congrats on a great quarter and a strong end to the strong into the year. I was wondering if you could talk a little bit about any expected business impacts from tariffs and do you have any thoughts on how the tariffs manufacturer manufacturing and supply chain costs potential headwinds are.
Speaker Change: We do have a slight impact on some.
Speaker Change: Some assembly parts that we that we procure out of mainland China.
Speaker Change: And so we have factored that into our guidance, but the I would say it's relatively immaterial.
Speaker Change: Challenges said O U S business, especially with your focus on expansion.
Speaker Change: Sure Hi, Michaela I'll take that one so we had we did have a comprehensive review.
Theyre not main components for those for those for those assembly of our pumps. So.
Speaker Change: On tariff impacts.
Speaker Change: As you know our assembly production is here in the U S and are considerable production is down in Nicaragua.
Speaker Change: We're assuming about a half a point for the tariff impact on our full year gross margin.
Speaker Change: Yeah.
Speaker Change: Okay got it thank you.
Speaker Change: Honestly those countries are not impacted.
Speaker Change: We do have a slight impact on some.
Speaker Change: Okay.
Speaker Change: Some assembly parts that we that we procure out of mainland China.
Speaker Change: It doesn't look like there are any further questions at this time I would like to turn the floor back to Linda <unk> for closing remarks.
Speaker Change: And so we have factored that into our guidance, but the I would say it's relatively immaterial.
Speaker Change: So again I'd like to thank you all for joining US. This afternoon, we look forward to providing you with further updates on additional opportunities as we make progress against our 2025 milestones have a great rest of your day.
Speaker Change: They are not main components for those for those for those assembly of our pumps. So.
Speaker Change: We're assuming about a half a point for the tariff impact on full year gross margin.
Thank you. This does conclude today's teleconference. We thank you for your participation you may disconnect your lines at this time.
Speaker Change: Right.
Speaker Change: Okay got it thank you.
Okay.
It doesn't look like there are any further questions at this time I would like to turn the floor back to Linda <unk> for closing remarks.
Speaker Change: So again I'd like to thank you all for joining US. This afternoon, we look forward to providing you with further updates on additional opportunities as we make progress against our 2025 milestones have a great rest of your day.
Speaker Change: Thank you. This does conclude today's teleconference. We thank you for your participation you may disconnect your lines at this time.
Speaker Change:
Speaker Change: Uh huh.
Speaker Change: Oh.
Speaker Change: [music].
Speaker Change: I know I said, Florida.